This 1999 national survey,
prepared by the state PIRGs with assistance from state and local member groups
of the Consumer Federation of America (CFA), updates our 1993, 1995 and 1997
national surveys.1 The disturbing
trend of more, and higher, fees is continuing. Data from 1999 are compared
on a state by state basis and to 1997 national averages.2
Since bank deregulation
began in the early 1980s, the PIRGs and other consumer groups have conducted
numerous studies documenting skyrocketing consumer banking fees. Our studies
have helped to focus national attention on the problem of skyrocketing bank
fees.
Our findings show a continuing
cost spread (or, "big bank fee gap") between big banks and small
banks, although small banks are beginning to narrow the gap somewhat. Our
results are substantiated by the results of the Federal Reserve Board's annual
fee reports to Congress, which find that multi-state banks impose higher fees
than locally owned banks. The best deal, for consumers who qualify for membership,
is at member-owned credit unions. Others can find lower fees at small, locally-owned
community banks.
The survey results are
profoundly disturbing. Bankers are punishing low- and middle-income consumers
with unjustifiable fee increases while bank profits soar to new records each
year.
Meanwhile, a bank-friendly
Congress continues a massive rollback of critical laws that protect consumers,
communities and taxpayers. 1994 legislation promoting interstate branching
has contributed to the merger frenzy that is leading to more higher-cost,
multi-state banks. In 1996, the Congress weakened the Truth in Savings Act
and other consumer laws, making it harder for consumers to compare fees. This
year, both the House and Senate have already overwhelmingly approved so-called
Financial Modernization legislation that would expand bank powers to sell
insurance and investment products, without concomitant consumer safeguards.
The legislation, now in a conference committee, would encourage the growth
of bigger, higher fee banks, leading to less consumer choice and higher fees
for all Americans. It needs numerous amendments, including the following:
